BUSINESS SEGMENT INFORMATION

12 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

The company defines its operating segments as components of its business where separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The company has three operating segments, America's Commercial Truck and Industrial, Europe and Asia-Pacific Commercial Truck and Industrial, and Aftermarket and Trailer. America's Commercial Truck and Industrial and Europe and Asia-Pacific Commercial Truck and Industrial are aggregated into one reportable segment, Commercial Truck and Industrial. The company’s Chief Operating Decision Maker (CODM) is the Chief Executive Officer.

      The two reportable segments at September 30, 2015, are as follows:

• The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, primarily for medium- and heavy-duty trucks, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. This segment also includes the company's aftermarket businesses in Asia Pacific and South America; and

• The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement parts to commercial vehicle and industrial aftermarket customers. This segment also supplies a wide variety of undercarriage products and systems for trailer applications in North America.

     Segment EBITDA is defined as income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization, non-controlling interests in consolidated joint ventures, loss on sale of receivables, restructuring expense and asset impairment charges. The company uses Segment EBITDA as the primary basis for the CODM to evaluate the performance of each of its reportable segments.

     The accounting policies of the segments are the same as those applied in the consolidated financial statements, except for the use of Segment EBITDA. The company may allocate certain common costs, primarily corporate functions, between the segments differently than the company would for stand alone financial information prepared in accordance with GAAP. These allocated costs include expenses for shared services such as information technology, finance, communications, legal and human resources. The company does not allocate interest expense and certain legacy and other corporate costs not directly associated with the segment. In fiscal year 2014, amounts for fiscal year 2013 were recast to reflect Mascot in discontinued operations (see Note 3).

Segment information is summarized as follows (in millions):

	Commercial Truck & Industrial		Aftermarket & Trailer		Elims			Total
Fiscal year 2015 Sales:
External Sales	$	2,649	$	856	$	—		$	3,505
Intersegment Sales	90		28		(118		)	—
Total Sales	$	2,739	$	884	$	(118	)	$	3,505
Fiscal year 2014 Sales:
External Sales	$	2,876	$	890	$	—		$	3,766
Intersegment Sales	104		30		(134		)	—
Total Sales	$	2,980	$	920	$	(134	)	$	3,766
Fiscal year 2013 Sales:
External Sales	$	2,825	$	847	$	—		$	3,672
Intersegment Sales	95		24		(119		)	—
Total Sales	$	2,920	$	871	$	(119	)	$	3,672

Segment EBITDA:	2015			2014			2013
Commercial Truck & Industrial	$	216		$	218		$	192
Aftermarket & Trailer	123			106			87
Segment EBITDA	339			324			279
Unallocated legacy and corporate expense, net (1)	(5		)	(10		)	(15		)
Interest expense, net	(105		)	(130		)	(126		)
Provision for income taxes	(1		)	(31		)	(64		)
Depreciation and amortization	(65		)	(67		)	(67		)
Loss on sale of receivables	(5		)	(8		)	(6		)
Restructuring costs	(16		)	(10		)	(23		)
Antitrust settlement with Eaton, net of tax (2)	—			208			—
Specific warranty contingency, net of supplier recovery	—			8			(7		)
Pension settlement losses	(59		)	—			(109		)
Gain on sale of equity investment	—			—			125
Goodwill and asset impairment charges	(17		)	—			—
Noncontrolling interests	(1		)	(5		)	(2		)
Income (loss) from continuing operations attributable to Meritor, Inc.	$	65		$	279		$	(15	)

(1) Unallocated legacy and corporate costs, net represents items that are not directly related to the company's business segments. These costs primarily include asbestos-related charges associated with the company's year-end liability remeasurement, pension and retiree medical costs associated with sold businesses and other legacy costs for environmental and product liability. In fiscal year 2013, unallocated legacy and corporate costs, net includes approximately $4 million of executive severance related to the company's former Chief Executive Officer.

(2) Adjustment associated with the company's share of the antitrust settlement with Eaton less legal expenses incurred in fiscal year 2014.

Depreciation and Amortization:	2015			2014			2013
Commercial Truck & Industrial	$	59		$	61		$	60
Aftermarket & Trailer	6			6			7
Total depreciation and amortization	$	65		$	67		$	67
Capital Expenditures:	2015			2014			2013
Commercial Truck & Industrial	$	71		$	71		$	46
Aftermarket & Trailer	8			6			8
Total capital expenditures	$	79		$	77		$	54
Segment Assets: (1)	2015			2014			2013
Commercial Truck & Industrial	$	1,569		$	1,755		$	1,822
Aftermarket & Trailer	448			458			485
Total segment assets	2,017			2,213			2,307
Corporate (2)	434			516			550
Less: Accounts receivable sold under off-balance sheet factoring programs	(256		)	(244		)	(305		)
Total assets	$	2,195		$	2,485		$	2,552

(1) Prior year amounts have been recast to reflect the early adoption of ASU 2015-03, Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.

(2) Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs.

Sales by geographic area are based on the location of the selling unit. Information on the company’s geographic areas is summarized as follows (in millions): 

Sales by Geographic Area:
	2015		2014		2013
U.S.	$	1,733	$	1,466	$	1,408
Canada	70		68		68
Mexico	491		652		615
Total North America	2,294		2,186		2,091
Sweden	325		369		366
Italy	204		234		216
United Kingdom	76		82		82
Other Europe	90		111		108
Total Europe	695		796		772
Brazil	198		408		449
China	90		146		138
India	140		114		114
Other Asia-Pacific	88		116		108
Total sales	$	3,505	$	3,766	$	3,672

Assets by Geographic Area:
	2015		2014
U.S. (1)	$	995	$	1,050
Canada	30		50
Mexico	236		251
Total North America	1,261		1,351
Sweden	108		104
United Kingdom	211		216
Italy	77		81
Other Europe	176		182
Total Europe	572		583
Brazil	136		272
China	118		154
Other Asia-Pacific	108		125
Total	$	2,195	$	2,485

(1) Prior year amounts have been recast to reflect the early adoption of ASU 2015-03, Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.

Sales to AB Volvo represented approximately 24 percent, 27 percent and 24 percent of the company’s sales in each of fiscal years 2015, 2014 and 2013, respectively. Sales to Daimler AG represented approximately 20 percent, 18 percent and 15 percent of the company’s sales in fiscal years 2015, 2014 and 2013, respectively. Sales to Navistar International Corporation represented approximately 11 percent, 12 percent and 10 percent of the company's sales in each of fiscal years 2015, 2014 and 2013, respectively. No other customer comprised 10 percent or more of the company’s sales in any of the three fiscal years ended September 30, 2015.